Why do we ever trust anything politicians ever say?

[vxr8mate]

Listening to Heston of RBS today I got the idea the tax payer will never see a penny of their investment in to RBS and I distinctly remember Alistair Darling telling us all ‘we will not lose money on this bailout;’ however as usual he was wrong / lied and nobody becomes accountable!

The same happened with Blair and his fictitious WMD’s in Iraq, but now he’s sunning himself from his yacht in the Med.

It wasn’t long ago Cameron was telling us all how European courts wouldn’t be allowed to dictate policy to UK courts. Well they are doing exactly that with Qatada!

Who remembers John Gummer, the MP that fed hamburgers to his kids while telling us ‘there is no mad cow disease?’ Although come to think about it he was probable just stupid (and probably doesn’t see his kids very often).

As a populace, why do we fall for all the crap they keep coming out with?

[Marf]

vxr8mate said:

Listening to Heston of RBS today I got the idea the tax payer will never see a penny of their investment in to RBS and I distinctly remember Alistair Darling telling us all ‘we will not lose money on this bailout;’ however as usual he was wrong / lied and nobody becomes accountable!

What has Hester said that makes you disbelieve we will make money on the investment in the long term?

[Rouleur]

Only a fool would believe anything a politician says. They just tell us what they want us to hear.

[Marf]

Rouleur said:

Only a fool would believe anything a politician says. They just tell us what they want us to hear.

What about ID Cards/NIR?

[dandarez]

Because like all 'normal' human beings, we 'live in hope'.

[vxr8mate]

Marf said:

vxr8mate said:

Listening to Heston of RBS today I got the idea the tax payer will never see a penny of their investment in to RBS and I distinctly remember Alistair Darling telling us all ‘we will not lose money on this bailout;’ however as usual he was wrong / lied and nobody becomes accountable!

What has Hester said that makes you disbelieve we will make money on the investment in the long term?

He has told his staff that most of the tax payer’s investment has already been spent ‘cleaning’ up the toxic debt.

[Marf]

vxr8mate said:

Marf said:

vxr8mate said:

Listening to Heston of RBS today I got the idea the tax payer will never see a penny of their investment in to RBS and I distinctly remember Alistair Darling telling us all ‘we will not lose money on this bailout;’ however as usual he was wrong / lied and nobody becomes accountable!

What has Hester said that makes you disbelieve we will make money on the investment in the long term?

He has told his staff that most of the tax payer’s investment has already been spent ‘cleaning’ up the toxic debt.

With the greatest respect, if you feel we won't get our money back based on him saying that then you need to understand better how we bailed them out.

We own shares in RBS, if their share price goes above what we paid for the shares, we are quids in. If the share price returns to pre-2007 levels and we sell our stake, we'd be able to pay off the entire deficit.

The bailout money having been spent does not indicate that we have lost the money invested into the business.

Edited by Marf on Wednesday 8th February 13:45

[vxr8mate]

Marf said:

vxr8mate said:

Marf said:

vxr8mate said:

Listening to Heston of RBS today I got the idea the tax payer will never see a penny of their investment in to RBS and I distinctly remember Alistair Darling telling us all ‘we will not lose money on this bailout;’ however as usual he was wrong / lied and nobody becomes accountable!

What has Hester said that makes you disbelieve we will make money on the investment in the long term?

He has told his staff that most of the tax payer’s investment has already been spent ‘cleaning’ up the toxic debt.

With the greatest respect, if you feel we won't get our money back based on him saying that then you need to understand better how we bailed them out.

We own shares in RBS, if their share price goes above what we paid for the shares, we are quids in. If the share price returns to pre-2007 levels and we sell our stake, we'd be able to pay off the entire deficit.

The bailout money having been spent does not indicate that we have lost the money invested into the business.

Edited by Marf on Wednesday 8th February 13:45

Didn’t we also agree to underwrite the toxic element of the debt brought about by the bank selling dodgy mortgages etc. Surly that is tax payer’s money propping up that part of the bank.

Besides we lost money when Virgin purchased Northern Rock, what makes you think RBS will offer any return?

[Marf]

Northern Rock is slightly different to RBS as it was fully nationalised, it also had fewer operations than RBS, basically vanilla banking, insurance and mortgages, unlike RBS which has an IB division.

WRT to its toxic debt, it is offloading it as time goes on, the underwriting is basically the government saying they'll back it if it goes tits up. All it has provided at the moment is market confidence. Only if the creditors start to default would we be on the hook for the shortfall.

Do I know for sure that RBS will return a profit on our investment? No, but its a damned sight more likely to than Northern Rock, and Hester is taking positive steps to make sure it does return a profit on our investment, steps so positive that the board felt he deserved a bonus as per his contract

The whole issue is more complex than the media paints it. This is not unexpected as most people don't want the minutiae, they want a nice simple black and white opinion to embrace as their own and repeat ad nauseum.

Edited by Marf on Wednesday 8th February 14:11

[AJS-]

I don't.

[Camoradi]

Marf said:

With the greatest respect, if you feel we won't get our money back based on him saying that then you need to understand better how we bailed them out.

and then.....

Only if the creditors start to default would we be on the hook for the shortfall.

You will of course understand that we would not be "on the hook" for any shortfall. For example, if when everything was wound down, RBS went bust with liabilities of say £100bn more than its assets, the government as a shareholder would not be in any way responsible for this shortfall. The government shareholding which originally cost £45bn would presumably be worthless, so we would have lost our original investment, but the taxpayer would not be responsible for any "shortfall"

I think you may have been aware of this but there are many who seem to think that owning shares in a limited (liability) company somehow incurs this type of liability

[thinfourth2]

I always assume they will do exactly the opposite as to what they have said they will do

[Marf]

Camoradi said:

Marf said:

With the greatest respect, if you feel we won't get our money back based on him saying that then you need to understand better how we bailed them out.

and then.....

Only if the creditors start to default would we be on the hook for the shortfall.

You will of course understand that we would not be "on the hook" for any shortfall. For example, if when everything was wound down, RBS went bust with liabilities of say £100bn more than its assets, the government as a shareholder would not be in any way responsible for this shortfall. The government shareholding which originally cost £45bn would presumably be worthless, so we would have lost our original investment, but the taxpayer would not be responsible for any "shortfall"

I think you may have been aware of this but there are many who seem to think that owning shares in a limited (liability) company somehow incurs this type of liability

So have we or have we not underwritten their toxic debt? Must admit I thought all their toxic assets were placed into another company to avoid causing any issues to RBS.

Edited by Marf on Wednesday 8th February 14:31

[vxr8mate]

Owning 83% of a bank that lost £750 million in six months last year tells me that any return on our investment here is unlikely in the short term. In the long term RBS could I suppose see shares increase but by the same virtue they may lose money.

Not questioning Heston’s ability (or his justification for taking a bonus), but ‘you can’t polish a turd as they say.’

Call me cynical here but I just see another ‘fire sale’ with the taxpayer losing out again.

[Marf]

vxr8mate said:

Owning 83% of a bank that lost £750 million in six months last year tells me that any return on our investment here is unlikely in the short term. In the long term RBS could I suppose see shares increase but by the same virtue they may lose money.

Not questioning Heston’s ability (or his justification for taking a bonus), but ‘you can’t polish a turd as they say.’

Call me cynical here but I just see another ‘fire sale’ with the taxpayer losing out again.

You're cynical

The £750m loss represents 1.6% of the money we invested. It's peanuts in the grand scheme of things.

With correct and prudent management I see no reason why the RBS share price will not grow to exceed the buy in price we paid over time.

[Camoradi]

Marf said:

So have we or have we not underwritten their toxic debt?

I don't know. I will presume that the answer is yes, and that you are asking a question to which you already know the answer. This being the case, we would be liable to the extent that the underwriting arrangments dictate for, and I stand corrected. My point regarding the £45bn share purchase which is what I thought you were referring to earlier still stands though. It carries no further liability

ETA Sorry, you have edited your reply whilst I was posting. I didn't mean to misquote you

[Marf]

Camoradi said:

I don't know. I will presume that the answer is yes, and that you are asking a question to which you already know the answer. This being the case, we would be liable to the extent that the underwriting arrangments dictate for, and I stand corrected. My point regarding the £45bn share purchase which is what I thought you were referring to earlier still stands though. It carries no further liability

I edited my post above, I'm not 100% on whether or not we underwrote it or whether or not it was moved into another vehicle.

WRT to your point re liability from the share purchase, yes, of course I agree with you. I had not meant to infer that the share purchase automatically put liability onto the government for their debt.

Camoradi said:

ETA Sorry, you have edited your reply whilst I was posting. I didn't mean to misquote you

No problem at all

[Camoradi]

so we're in violent agreement

Like you, I hope we do come out of this on the upside. I guess it will come down to how long we can wait...

[Marf]

Camoradi said:

so we're in violent agreement

Like you, I hope we do come out of this on the upside. I guess it will come down to how long we can wait...

I hope so too, as much as it pains me to say it the RBS bailout may actually turn out to be a master stroke by Gordon Brown etc, it has the potential to be very profitable for us.

[AJS-]

Marf said:

You're cynical

The £750m loss represents 1.6% of the money we invested. It's peanuts in the grand scheme of things.

With correct and prudent management I see no reason why the RBS share price will not grow to exceed the buy in price we paid over time.

I think we've already seen a flash of the reason why I believe this won't happen. Bonus payments are politicised, it's lending (or lack of) to businesses has also been politicised and no doubt will be again, redundancies will be too. And when things eventually do start to pick up it's comparative performance, pay and staffing levels will also be politicised. And all this under a still relatively popular Tory/Lib coalition. Imagine what election time will be like with the Labour party whipping up their eejits into a froth about fat cat bankers hording all the money. Let alone when they get back into power (and it is a when, unfortunately).

Same sort of reasons nationalised industries nearly always end up costing more than they produce, and don't work also apply to banks.